Andrew Dilnot, the economist who has spearheaded a government-commissioned report into the funding system for the care of the elderly, has expressed confidence that there will be some "shift" on his proposals by 2014, amid fears his report could be kicked into the "medium length" grass.

The proposals outlined in the report, published on Monday, seek to inject more funding into the care system by tapping into people's assets. The typical 55- to 64-year-old in the UK has a total wealth of £200,000.

One key recommendation is to allow councils to take on a major financial services role.

Under the scheme, town halls will be empowered to make a loan at a preferential rate against the value of a property owned by someone entering a care home. The loan would be redeemed on the sale of the property after the person dies.

Although the centrepiece of Dilnot's report will be a recommended cap of about £35,000 on individual liability for care costs, which would require underwriting by the government, other proposals will seek to make it easier for people to draw on their assets without having to sell their home during their lifetime.

Dilnot said the proposals would cost the state about £1.7bn a year.

He told BBC Radio 4's Today programme: "That's one four hundredth of total public spending – one quarter of one percent, and our feeling is that an area that causes so much anxiety for so many people, paying one quarter of one percent of public spending is a price well worth paying."

Charities and welfare groups are calling on the government and Labour to seize the opportunity presented by Dilnot to begin a shakeup of the care funding system. An open letter from 26 leading charities declared on Sunday: "We expect all parties to deliver on this."

While the prime minister, David Cameron, and Labour leader, Ed Miliband, have both expressed their readiness to enter cross-party talks to seek consensus on the thorny issue, the chancellor, George Osborne, is reported to be reluctant for the Treasury to pick up the tab for reform.

The health secretary, Andrew Lansley, said he expected the report, which applies to England and Wales, to leave many issues open for debate – not least the question of how the cost of a cap, estimated at £2bn or more a year, will be funded.

Lansley said over the weekend that it would not be fair if reform led to "people of working age paying additional taxes in order to support those who are older receiving additional benefits".

In a blog on the Liberal Democrat Voice website, the care services minister, Paul Burstow, said: "Don't expect to hear the government's final word on social care. The Dilnot report will mark an important milestone on the road to reform, but there are other questions and more milestones to come."

A No 10 source said the report was something to be looked at "very carefully". There would not be a detailed government response straight away.

The Daily Telegraph quoted a Downing Street source saying that the report would be pushed into the "medium length grass" while the coalition seeks a cross-party consensus on how to pay for the reforms because of the "hefty price tag" attached.

However, Dilnot appeared confident that his proposals will not end up on a shelf to gather dust, saying he expected the government would now consult on his proposals, with a white paper to be published next spring.

"I think in the white paper next spring there is every chance we will get to move forward," he said.

"It may not be that money will be spent in the very short run. By the time there is legislation, it will be very hard to be spending money until 2014, probably. By then, I think, we're are almost certain to see some shift."

Miliband described the issue as a "national priority" which was seeing the "squeezed middle" suffering the most.

Speaking on ITV's Daybreak, he explained that he was calling for cross-party consensus on the issue because it is so emotionally-charged and needs a long-term approach to be effectively tackled.

Miliband said: "This isn't the first report that we've had on care for the elderly. There have been lots of reports, including under our government. And one of the reasons why they never got implemented was it is such an emotive and difficult issue. You have scare stories and it becomes that party-political bickering which often we see.

"The other reason is it's such a long-term issue. We want our kids to know that there's going to be a proper system in place for them, after all. This is a long-term challenge for the country."

Dilnot said his report recommended lifting the threshold for means-tested state support, which is available only to those with personal assets worth less than £23,250, to £100,000.

According to the Joseph Rowntree Foundation, about a million elderly homeowners have properties worth more than £100,000 yet qualify for means-tested benefits.

He said the commission was proposing a cap on so-called "hotel costs" in residential homes so that care costs could not be disguised as accommodation costs.

For people receiving state help, the cap should be set at between £7,000 to £10,000 a year.

Dilnot told Today the support was being targeted on the "bottom half of the population" and particularly those with the lowest levels of wealth through a combination of the cap and the means test.

"Anybody with assets of more than £150,000, for them the cap would be £35,000 but somebody who has a house worth only £70,000 they wouldn't pay £35,000, they would only pay £18,000, compared to the current system where they would lose almost everything."

But he admitted "some of the better off would gain" because the system would target support on those with the highest care needs, some of whom will have relatively high incomes.

Dilnot said the uncertainty decades down the line on what the costs of our care might be was "too great" for an insurance market to work. "Nowhere in the world is there an insurance market that can do this," Dilnot told Today.

Lib Dem MP Andrew George said his party would be "very keen" to push forward care reform as an issue that distinguished them from the government.

He told Radio 4's Sunday night programme, Westminster Hour, that Dilnot was pushing things "in the right direction" by pushing the bill "back towards the taxpayer".

"Certainly that is something we would be very keen to push for and certainly if you take our policy back over the last decade or more we have been very clear in this area in believing that this is an extension of the welfare state which we should protect," he said.

An estimated 20,000 people sell their home each year to pay for their care costs, which exceed £50,000 for one in four people and run to more than £100,000 for one in 10. So-called hotel costs –accommodation and food in care homes – come on top of this. One of the key issues in Monday's report will be what Dilnot says about these extra costs, which can be as much again as the bill for care alone.

The proposal for councils to lend to homeowners entering residential care represents a radical development of a little-known existing provision for deferred payment of care home fees.

Under the Health and Social Care Act 2001, councils can make a deferred payment arrangement by taking a charge on an individual's property. But interest is not levied until 56 days after the person's death, making the scheme unattractive for councils. The key difference under the new plan is that the council would make a return on the loan from day one, being able to charge interest straight away.

The Local Government Association reported last year that demand for such arrangements had almost doubled over 18 months because the housing market slump had made it hard to sell property. It said restrictions could be considered if such requests kept increasing. A spokesman was unable to say at the weekend if councils had begun to limit the number of arrangements.

Another scheme studied by the Dilnot commission is the Joseph Rowntree Foundation's "home cash plan" pilot, run with a financial services company and three councils.

It enables homeowners to free up money from the value of their property to pay for care at home. Under the scheme, in Maidstone, Kent, and in the London boroughs of Kensington & Chelsea and Islington, people can borrow an initial £5,000 and further instalments up to a £30,000 ceiling. However, the arrangements carry fees of about £1,000.